Somalia’s Cabinet has approved a proposed $1.26 billion federal budget for 2027, setting out the government’s spending envelope as the country faces slower economic growth and pressure on donor funding.
The Council of Ministers endorsed the $1,259,238,253 proposal at a special meeting on 27 October chaired by Acting Prime Minister and Deputy Prime Minister Salah Ahmed Jama, according to the government’s announcement. Cabinet approval is a step in the budget process; parliamentary approval is required to enact the spending plan.
The Finance Ministry’s published budget timetable requires the Cabinet-approved appropriation bill and the minister’s budget speech to reach both houses of parliament by 30 October. The deadline for the two chambers to approve the following year’s budget is 31 December.
Under that framework, the executive’s proposal must explain revenue sources, ministry allocations and proposed policy changes. It also covers deficit financing, debt and the economic assumptions behind the spending plans, giving legislators a basis for scrutinising whether the proposed commitments can be funded.
The economic outlook leaves little room for loose spending. In its 5 October assessment, IMF staff projected growth of 2.3 per cent this year and 2.7 per cent in 2027, with inflation reaching 6.5 per cent in 2026. Climate shocks, regional conflict and further aid reductions were among the risks identified.
The Fund projected a fiscal deficit of 0.5 per cent of gross domestic product in 2027 under conservative assumptions about budget-support grants. It urged stronger customs and income-tax enforcement, harmonised sales taxes across federal and member-state authorities, and higher non-tax revenue.
A central revenue objective is to cover the government’s operating costs from domestic resources. The IMF also called for tighter expenditure controls and management of financial risks arising from public-private partnerships, alongside continued investment in education and climate resilience.
Related: EU outlines duty-free access available to Somali exporters.
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